Classification of NuWays AG to Einhell Germany AG

Company Name:	Einhell Germany AG
ISIN:	DE0005654933
Reason for the research:	Update
Recommendation:	BUY
from:	04.10.2024
Target price:	EUR 84
Target price on sight of:	12 Monaten
Last rating change:
Analyst:	Konstantin Völk

Power X-Change paves the way for further market share gains

On Tuesday, Einhell attended the European Midcap Conference in Paris, hosted by NuWays in cooperation with CF&B. Here are our key takeaways:

Mid-term sales target: Einhell aims to reach € 2bn in sales between FY27-FY29, depending on the geopolitical situation (eNuW FY28e: € 1.2bn). In addition to expansions into new geographic markets, growth should also come from a steadily increasing market share in DACH (currently 39% for cordless garden products and 20% for tools), which is driven by Einhell’s Power X-Change products.

Furthermore, with € 2bn in sales, Einhell’s CEO Kroiss estimates generating a 10% EBIT margin due to economies of scale and an increasing share of the high margin Power X-Change products (51% of sales in H1’24). After reaching a 10% EBIT margin, Management does not intend to increase profitability further but instead focus on delivering the best possible experience for customers. The concept of scale economies shared (passing through the benefit of scale to the customer, which increases sales even further) is a reasonable strategy in our view and does not only help to strengthen Einhell’s brand perception but also builds a moat by reaching scale. In addition, we like Kroiss’ long-term view and customer focus, who not only contributed substantially to Einhell’s past success in his role as CEO since 2003 but is also Einhell’s second largest shareholder.

US expansion: To fuel future growth, Einhell intends to get a foot into the US DIY market (c. 56% of global DIY). As building a proper infrastructure for the US market can be both time-consuming and costly, the preferred way to enter the American market is via M&A. However, finding a suitable target for c. € 150m has turned out to be a difficult task.

Brand building partnerships: Since January 1st, Einhell has been the partner of the Mercedes-AMG PETRONAS F1 Team and supports the team with its Power X-Change devices as its “Official Tool Expert”. Further, since August 2021, Einhell has also been the “Official Home and Garden Expert” for FC Bayern Munich. Management intends not to add a third comparable partnership, emphasize however the importance of the partnership with Mercedes to strengthen its brand in the US. Formula 1 has recently gained popularity in the US and hosts already three races in 2025 (Miami, Austin, Las Vegas). 

We continue to like the stock and reiterate BUY with an unchanged PT of € 84, based on DCF.

You can download the research here: http://www.more-ir.de/d/30989.pdf
For additional information visit our website: www.nuways-ag.com/research

Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss bestimmter Börsengeschäfte.
Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben analysierten Unternehmen befinden sich in der vollständigen Analyse.
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